NEWS AND COMMENTARY

Published on: July 8, 2016

Can a Court Force Me into a Conservatorship if I Have a Mental Disability?

A conservatorship exists whenever a California probate court determines that a person is not capable of taking care of him or herself or managing his or her finances. In the case of an individual who suffers from a mental disorder, a court may order what is known as an LPS conservatorship if there is sufficient evidence that the person is “gravely disabled,” and “unable to provide for his or her basic personal needs for food, clothing, or shelter.” But merely having a mental illness does not, in an and of itself, justify imposing a conservatorship against a person’s will.

Court Reverses “Close Call” Conservatorship Order

A California appeals court recently addressed the type of evidence necessary to create an LPS conservatorship for an individual with a mental disorder. The subject of this case is a man suffering from schizophrenia. He had been hospitalized multiple times over the years and has been required to take psychiatric medications since he was a child.

Published on: July 7, 2016

How Does Estate Planning Work With Unmarried Partners?

by Scott C. Soady

Marriage is not for everyone. Many couples are happy in long-term relationships that do not result in marriage or even a legally recognized domestic partnership. But if you are in such a relationship, you and your partner should consider the estate planning implications if one of you passes away. California law does not treat married and unmarried partners in the same way. A spouse has certain automatic community property and inheritance rights that an unmarried partner does not.

Partner’s Settlement Ends Up Hurting Her

That is not to say unmarried partners are completely unprotected. Since the 1970s, California courts have accepted and enforced contracts between unmarried partners. This can include oral promises to treat property acquired by either partner during the relationship similarly to community property. In these types of cases, commonly known as “Marvin petitions,” the surviving partner may seek to enforce these promises.

Published on: June 27, 2016

Estate Planning, Charitable Pledges, and Community Property

by Scott C. Soady

Many people pledge money to charity as part of their estate planning. In California, charitable pledges are generally not enforceable in court unless the donor receives some consideration, thereby creating a binding contract. For example, if a college offers to name a building after you in exchange for your gift, that would be consideration for your pledge. If you pledge money contingent on other people making similar donations, that would constitute mutual consideration among all of the donors.

If you do make a binding pledge as part of your estate plan, however, make sure you consider the wishes of your spouse. Under California law, any community property held by a married couple is owned one-half by each spouse. This means you may not make a gift of your spouse’s share of such property without his or her consent.

Ex-Husband Cannot Pay for Pledges With Ex-Wife’s Share of Community Property

Published on: June 26, 2016

Should My Estate Plan Be Digital?

by Scott C. Soady

For many of us the “paperless office” is a reality. Our personal and professional lives reside online through our laptops, smart phones, and cloud storage. But what does this mean for our estate planning?

Recently, an article on CNBC.com discussed the growing popularity of “digital document archives,” which offer specialized cloud storage for estate planning materials including wills, powers of attorney, and health care directives. The idea behind such services is to make it easier for family members or other fiduciaries to locate important estate planning documents. For example, if a person dies, his or her executor could go to a digital archive and promptly download a copy of the will.

Are “Digital Wills” Admissible in California?

Published on: June 18, 2016

Does My Estate Have to Pay Taxes After I Die?

by Scott C. Soady

An often overlooked aspect of estate planning is taxes. After all, death does not extinguish any tax debt that you may owe to the Internal Revenue Service or the State of California. It is possible your estate will owe tax for income earned on your assets even after your death.

Federal Government Collects on Unpaid Estate Tax Bill

For example, the estate of some wealthy Californians may be liable for the federal estate tax. The estate tax is technically a “tax on your right to transfer property at your death.” But most estates will never owe this tax because the law contains a sizable exemption before tax is assessed. For individuals who die in 2016, the exemption is $5.45 million. There is also an unlimited “marital deduction” for transfers from a deceased spouse to a surviving spouse.

Published on: June 17, 2016

What Happens to My Child Support Obligations if I Die?

by Scott C. Soady

One of the most important reasons to make an estate plan is to provide for your family after you are gone, but family can be a legally complicated concept. For instance, if you voluntarily make child support payments for a minor who does not live with you, do those payments automatically end upon your death? Alternatively, can an ex-spouse enforce a child support order contained in a divorce decree against your estate?

Child Support Can Be Enforced as a Creditor’s Claim

A recent New Jersey case illustrates how these questions can play out in court. The case involves the estate of a New Jersey man who had a son with a woman who lives in New York. In 2008, the parents entered into a voluntary child support agreement whereby the father agreed to pay the mother $3,000 per month in child support until the son reached the age of 21. The father also agreed to separately pay the child’s medical and educational expenses. A New York State court subsequently entered a child support order based on the parents’ agreement.

Published on: June 7, 2016

What Happens When a Family Member Compromises My Estate Plan?

by Scott C. Soady

Selecting a personal representative or executor for your estate is often the most important estate planning decision you will make. In most cases a spouse or family member is named as executor. But there may be situations in which you may wish to consider someone from outside the family, such as a professional fiduciary, to oversee the distribution of your assets after your death.

Daughter Ordered to Return Funds Illegally Diverted from Father’s Estate

For example, there may be times when you do not trust a family member to deal honestly and equitably with other family members. A recent case from here in California offers a useful illustration. This case involves an estate asset that was located nearly 20 years after the estate was opened. The deceased was a man with three children. He did not name any of the children as executor, but rather appointed an outside person to the role.

Published on: June 4, 2016

Can My Ex-Spouse Claim My Estate After I Die?

by Scott C. Soady

Divorce often alters a person’s estate planning priorities. After all, if you previously signed a will leaving your entire estate to your spouse, you probably want to reconsider that arrangement after your divorce becomes final. California law assumes that any gift you make to an ex-spouse under a pre-divorce will is revoked unless you expressly state otherwise. This assumes that the divorce itself becomes final before one of the spouses dies.

Court Fines Man $15,000 for Trying to Void Divorce After Ex-Wife’s Death

In a recent case, a California appeals court sanctioned a man who attempted to declare his earlier divorce void so that he could inherit from his deceased ex-wife’s estate. According to court records, the couple legally separated in 2009. In November 2010, following extended mediation, the parties filed a stipulated judgment—a divorce settlement—with a California Superior Court judge. A copy of the judgment signed by both spouses and stamped with the judge’s signature was then filed with the court clerk’s office.

Published on: June 3, 2016

Can I Limit the Scope of a Power of Attorney?

by Scott C. Soady

A power of attorney names someone to act as your agent. The agent may only take those actions expressly provided for in the power of attorney. For instance, you might sign a power of attorney authorizing your agent to sell your house. This does not mean the agent can also access your brokerage accounts or amend your will. You have the right to limit the powers that your agent may exercise on your behalf.

Marriage Alone Does Not Create a Power of Attorney

California courts are required to strictly apply the terms of a power of attorney. A recent case decided by a state appeals court in Santa Ana helps illustrate this point. This case sadly involves a man who died while under the care of a hospital. The widow sued the hospital for negligence and wrongful death. The hospital then moved to force the widow to submit her case to binding arbitration.

Published on: May 22, 2016

California Legislature May Approve “Digital Assets” Legislation

by Scott C. Soady

Estate planning is typically concerned with a person’s tangible possessions and assets. But in the modern age when more of our lives exist online, how does estate planning deal with so-called digital assets? The California legislature may attempt to answer that question in a bill now pending before the state Senate.

When you sign up for an online service like Google, Facebook, or Twitter, there are “terms of service” set by the provider that may explain what happens to your data in the event of your death. Facebook, for example, allows its users to provide instructions to “memorialize” or delete an account upon death. A memorialized account maintains the user’s data—photos, messages, et al.—but otherwise prevents anyone, including the personal representative of an estate, to access the actual account.

As the law in California presently stands, there is no uniform rule for how online service providers must deal with the post-death disposal of a user’s digital assets. California Assembly Bill 691 (AB 691) would change that. The bill, which was approved by the Assembly last year and recently cleared a Senate committee, would adopt a version of the Fiduciary Access to Digital Assets Act, a model law already adopted by about a dozen states.